LAUNCESTON, Australia (Reuters) – The prevailing market narrative after China’s overall November trade data was that the world’s second-biggest economy is softening and starting to show the strains of the trade dispute with the United States. After all, both imports and exports undershot forecasts for the month. But while there is nothing inherently incorrect in such commentary, one factor that may not be getting as much attention as it should – the lower-than-anticipated growth in imports may be largely related to weaker commodity prices. China’s exports rose 5.4 percent in November from a year earlier, well short of the 10 percent forecast in a Reuters poll. Imports grew a sluggish 3 percent, considerably weaker than the 14.5 percent forecast. The export weakness was largely put down to the end of front-loading of shipments to the United States ahead of the now postponed higher tariffs of 25 percent on $200 billion of imports from China that had been mooted by President Donald Trump. The import weakness was largely ascribed to slacker domestic demand. While this may be the situation for manufactured goods and services, it doesn’t appear to be the case for commodities. The problem with simply looking at the trade… continue reading